China to remove tariffs on some US products, but not pork or soybeans

The move is a gesture of goodwill before trade talks resume next month, analysts say.

Written By:
Washington Post |
Sep 11th 2019 - 8am.

Soybean plants grow in a field near Tiskilwa, Illinois, on June 19, 2018. Daniel Acker/Bloomberg

BEIJING - China extended an olive twig, rather than a branch, to the United States in their trade war Wednesday, Sept. 11, announcing it would exempt 16 American-made products from tariffs as a sign of goodwill ahead of talks scheduled for next month.

But the gesture, which Beijing said was designed to ease the dispute's impact on American companies, does not offer relief from tariffs on the big-ticket agricultural products that are causing the most hurt in the United States.

"China wants to claim the moral high ground before the October talks and to send a message of goodwill," said Yao Xinchao, professor of international trade at the University of International Business and Economics in Beijing. "It's all about molding public opinion" to portray the U.S. as the aggressor, Yao added.

China's Ministry of Finance said that 16 types of U.S. products would be exempt from retaliatory tariffs for a year from next Tuesday. The list included varieties of animal feed such as alfalfa and fish meal, cancer drugs gefitinib and capecitabine, base oil for lubricants and lubricating grease, and some farm chemicals.

Further exemptions will be announced in the coming weeks, the ministry said, and tariffs that have already been imposed will be refunded.

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But the list offers no respite for American farmers hit by Chinese tariffs on corn, soybeans and pork.

"Pork and soybeans are two important bargaining chips that China won't play easily," said Yao.

[Markets soar as China, U.S. resume trade talks in Washington in October ]

China and the United States have been involved in a tit-for-tat tariff battle, imposing rounds of duties on each other's products for more than a year.

President Trump has hoped that the tariffs would convince China to cave in to his demands to rebalance the trading relationship between the world's two largest economies. But Beijing has retaliated as much as it can - China exports far more to the U.S. than it imports - and has insisted any deal must be "mutually beneficial."

In the latest episode, the Trump administration declared it would add a 15% tax to consumer products from China, including clothing, footwear, pens, pencils, diapers, Bluetooth earbuds, televisions, golf clubs and fishing line. Those tariffs took effect Sept. 1.

At one point, Trump even ordered American companies to prepare to leave China.

Beijing responded by slapping tariffs on $75 billion of American goods, which in turn led Trump to increase tariffs on $300 billion in Chinese products from the previously announced 10% to 15%.

Wednesday's measures marked the first time in the dispute that tariffs have been removed, not added.

The Commerce Ministry said last week that Liu He, the vice premier who has been leading the trade negotiations from the Chinese side, would travel to Washington in early October for a new round of talks aimed at breaking the impasse.

This will be the 13th round of talks between Liu and his American counterpart, U.S. Trade Rep. Robert Lighthizer.

A U.S. Chamber of Commerce delegation led by executive vice president Myron Brilliant has been in Beijing this week holding talks with senior Chinese leaders, including Premier Li Keqiang. The tariff dispute has dragged down economic growth and business confidence, Brilliant said after meeting with Li.

"The uncertainty produced by U.S.-China trade tensions is exerting significant downward pressure on both economies," Brilliant said in a statement. "The time is now to strike a deal that addresses the U.S.'s legitimate concerns about market access, forced technology transfer, subsidies, and digital trade, while concurrently removing punitive and retaliatory tariffs."

Li, for his part, said the two sides should seek common ground based on the principle of equality and mutual respect, according to a report from China's state-run Xinhua news agency.

This article was written by Anna Fifield, a reporter for The Washington Post.